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Education Tax Benefits
RE:
Week Ending January 27, 2008
The New Year has begun and along with it
some new laws have been implemented. One new
law benefits taxpayers in two ways; if you are a
person contributing to a 529 Education Plan for
children or grandchildren, now you actually
receive dual benefits from the State of
Arizona for
doing so.
The first benefit: the money
grows, tax-deferred, as long as it’s used for
education purposes. The
second, big benefit: now you
can get an upfront tax deduction for up to $1500
if you contribute to the 529 plan in 2008. If you’re
a single person you are allowed to contribute up
to $750 and receive a tax deduction. If you’re
married, you are allowed up to $1,500 in
contributions to receive a tax deduction. But
remember, 529 plans allow you to contribute up to
as much as $60,000 at one time and there’s no
limit if you transfer money from one 529 to
another.
So, this is a great way to help the kids
and grandkids and to help you at the same
time.
This tax benefit is in addition to the tax
credit programs the State of Arizona offers,
such as the $1,000 Private School Tuition Credit,
the $400 Public School Credit benefit as
well.
There are many different educational
benefits Arizona offers
to its residents as an incentive to assist in the
education of our children.
Here are some points to remember:
•
New law took affect January 1,
2008
• Contributing
to a 529 plan is now a tax
deduction ($750 for single; $1,500
for
married)
• This is a tax
deduction, not be confused with other Arizona tax
credits (Private Tuition Credit,
$1000; Public School Credit, $400)
If
you have any questions, or would like more
information on this topic, please feel free
to call and schedule an appointment with
my office.
Respectfully,
Robert
F. Hockensmith, PC
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